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Are You Still Using Amazon Gift Cards? Here Is Why It Might Not Be A Great Idea

‍Amazon gift cards offer convenience but come with many drawbacks.

Gift Cards
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10 Min read
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Last Updated on
October 20, 2021

Several online retailers, including the big ones such as Amazon, offer digital gift cards as a way to shop or give rewards to employees, partners, and customers alike. 

Why do people opt for digital retail cards such as Amazon?

Traditional physical gift cards have enjoyed a long run of popularity across the globe and remain viable on a small scale. But, a post-pandemic reality has proliferated the need for digital shopping, thus making digital retail cards quite popular.

Today's digital gift cards are safer and more convenient than physical cards that were vulnerable to loss, theft, or fraud from duplication. For consumers, digital gift cards act as an excellent alternative to cash. End-users can also add digital gift cards to mobile wallets to make purchases easier and more secure.

Drawbacks of retail gift cards

For end-users

1. Retail gift cards offer non-flexible expiry options

The reasons end-users don’t use retail gift cards can vary. Some of them include:

  • Forgetfulness.
  • Losing the gift card. 
  • Lack of a holistic catalog.
  • The gift card expires or comes with restrictions.

Even if purchases are made with a gift card, there may be a small amount of money left, which, if not used, whether due to forgetfulness or inertia, ends up as money wasted.


“Retail cards such as Amazon have a short validity period thus making it difficult for users to use cards after the shelf period.”


2. Retail gift cards offer a limited choice for end-users

According to Investopedia, closed-loop cards such as Amazon gift cards offer a limited catalog and can throw a wrench into your shopping plans, especially if you are looking for something personalized or customized to you. Retail gift cards also limit purchasing power because a buyer cannot redeem rewards in many places. While Amazon users can only shop from an Amazon Catalog, a digital incentive solution lets users choose from a broad, holistic catalog. 

Research on gift-giving has shown that the thought behind a gift matters more than the gift itself. Amazon cards or gift cards from other retailers are more utilitarian in nature and may not evoke the dopamine effect on the recipient.

Customized reward solutions, on the other hand, are tailored to the needs of your recipient. They appeal to the cause and the context of the respondent and resonate with them on a more intrinsic level than Amazon or Starbucks cards.


For example, A respondent in an executive position would be more willing to accept a $100 charity donation to a Cancer Foundation rather than accept an Amazon gift card. While the $100 gift card is not going to compensate for their time, either way, an opportunity to contribute to a cause they care about, in this case, helps you win them over.


3. Lack of support

End-users using retail gift cards such as Amazon may have a tough time having a single point of contact, especially for customer queries. Each item in the catalog may have different terms and conditions, and navigating them can be a potential landmine as an end-user.

For large companies looking to execute a seamless incentive experience, a lack of customer support for retail gifting solutions may cause your brand to take a hit. It only takes one customer to leave a bad review of not being able to return a wrong purchase to ruin your company’s digital incentive program reputation.


For Companies

1. Unclaimed rewards

When you buy a gift card from, say, Amazon for $25 in fungible cash, it can be redeemed at a later date. But, not everyone redeems these gift cards. Studies have shown that over 25 percent of all gift cards distributed are never used.

To explain this in detail, let’s say you never spend the $25 gift card on the Walmart Store that your friend gave you. Your friend paid the chain $25, and the chain didn’t have to provide you with anything in return. It netted $25 at a 100% profit margin. In other words, when not redeemed, your $25 gift card is free money for the company.  

While most people who receive a gift card are quick to put it to use as more than 70% of all gift cards are redeemed within six months of purchase, according to one survey. But after that first 180 days, the rate of use tends to stagnate. At the one-year mark, just under 80% of cards are redeemed — and as time passes, they are less and less likely to see the light of day.




This leads to big online retailers such as Starbucks, Amazon, and Walmart getting vast amounts of money on unclaimed rewards. 




If you are exploring gift cards during the festive season or are looking to buy them for your firm, it helps to understand the drawbacks of gift cards and compare them with other rewarding platforms which don’t charge for unclaimed rewards


2. Online Retailers such as Amazon do not offer flexible expiry options

Companies and individuals have different rewarding requirements. The limited shelf life of Amazon or other retail gift cards puts the firms at a huge disadvantage, especially when they are starting to set up a rewards program for a particular use case and are figuring out what works for them.


A company distributing incentives to employees would prefer reward points that only expire when the employee opts to leave the organization rather than a gift with a fixed shelf life. 


For the admins and CXOs, when a gift card expires abruptly, it also incurs a lot of money on unclaimed rewards. As discussed earlier, low reward redemption rates of gift cards add up to big money when you consider that, between 2006 and 2018, more than $1.5 trillion in gift cards have been sold. Between 2005 and 2015 alone, unredeemed gift card balances amounted to an estimated $45.7B in the US alone. 

From the firm’s POV, this money is a loss and is better spent elsewhere.


3. Amazon doesn’t provide detailed analytics on your incentives, thus making the data from the reward program incomplete and fragmented.

Crafting a rewards program ain’t easy. Not only do HR admins or marketers ought to prove the ROI on their reward programs for their higher-ups, but analytics also can determine the success of a reward program. Calculating data on reward redemption patterns, gifts that end-users opt for, etc., will help you understand the user behavior and update the reward catalog based on feedback.

Online retail gift cards just don’t provide adequate data that helps you make the necessary call. 


Looking to build a successful employee rewards program with tools to track effective ROI and Analytics? Check out the best practices to build a successful employee rewards program >>>



4. Online retailers lack several key features that help you make your digital incentive program a success

i. Reward Scheduling

Companies today use more than a dozen tools to interact with various stakeholders such as employees, consumers, partners, etc. It is imperative for reward solutions to schedule rewards from the flow of work and based on complex conditions. 


A VP would prefer scheduling rewards for a sales team to achieve their targets from the CRM they already use rather than a different software.

Online retailers don’t let admins schedule/automate reward scheduling based on a particular milestone such as anniversary, birthday, etc. In addition to inconvenience, for admins and firms, it is a waste of time and money due to a lack of reward scheduling from their flow of work.


ii. Personalization

Personalization can mean several things in the context of rewarding. The final “Moment of Delight” when the recipient receives a gift matters the most for admins.

To achieve that, admins must personalize their reward campaigns based on the theme, brands, value, context, etc. 

Also Read: How to deliver a delightful reward experience with Plum catalog solution for SAP SuccessFactors.

This type of personalization is not possible with online retailers such as Amazon.


iii. Integrations

According to Statista, an average company in 2020 uses 80 SAAS applications. It is imperative for companies to connect their reward solution to the tools they use every day. Integrating seamlessly with their favorite applications not only helps firms run smarter rewards, incentives & loyalty programs, but it also helps them track data and measure analytics & ROI in a single place instead of a fragmented reward program.


5. Lack of DIY

DIY is a critical feature that ought to be considered by marketers, product managers, and other personas in an organization. Admins should set up an ideal reward program within minutes, and campaigns should be managed with the developers' negligible help.

Not only does a DIY setup saves time and costs, but it also helps admins manage the program seamlessly without having to coordinate with multiple teams.


6. Pricing options to suit different sizes of clients and needs

Each company has different rewarding use cases, be it for survey rewarding or for employee rewarding. 

Online retailers offer a one-size-fits-all solution that just doesn’t work for companies. Digital rewarding solutions such as Xoxoday, on the other hand, provide multiple pricing tiers for companies of different sizes and use cases.


Why should you shift to Xoxoday?

With a comprehensive reward solution such as Xoxoday, you can give out rewards in the form of Xoxo Codes, Xoxo Points, or Xoxo links. Rewards can be sent individually or in bulk to end-users. 

Each reward mode has its unique features, and we will discuss which one you should choose for different use cases.

Xoxo Codes



Xoxo Codes are alphanumeric reward codes available in standard denominations such as 5/10/50/100/500/1000/5000. These codes, which work like a currency, are unique, and end-users can add multiple codes in transactions. Similarly, users can use the excess amount available in any code in future transactions. 

As these codes aren’t linked to an email id or a phone number, they can easily be transferred to family/acquaintances if need so. They can also be sent to users either individually or en masse. 

This reward mode is perfect for admins, HR leaders, sales heads, and others when the end-user email id or phone number is unknown. Some of the use cases are lucky draws, contests, consumer promotions, sales promotions, etc.


Benefits of Xoxo Codes against gift cards like Amazon or Prepaid card or others:

  1. Admins can curate the catalog the way they want when sending these reward codes.
  2. Apt for situations where “gifts” need to expire.
  3. Helps firms calculate ROI and analytics for distributed rewards.
  4. They are easily transferable.
  5. Ease-of-use.


Xoxo Points


Xoxo points are reward points that can be used to distribute rewards to your employees, research panels, sales, stakeholders, or channel partners. These points are directly linked with your email id or mobile number. 

As Xoxo points are unique to a user, they can’t be transferred to other users. These points are fluid, meaning the denomination can be anything from 1 to 50,000 (even or odd numbers). 

The points get updated automatically in the linked email id or mobile number so that one does not have to get into the hassle of adding these points manually. The recipients can use distributed points on the Xoxoday Storefront.

For admins using Xoxo Points, the conversion value of points is equivalent to the base currency selected during sign-up. If USD is the base currency, 1 Xoxo Point = 1 USD. On the other hand, if Euro is the base currency, 1 Xoxo Point = 1 Euro. 

Xoxo Points are also instantly transferable to a user account. The email id or mobile number of the recipient acts as the unique identifier in this case.

When it comes to expiry, these points expire a year from the date of issue. The Super Admin and Admins of a firm can create Xoxo points under the threshold set for each admin. Xoxo Points, if not distributed, don’t expire for the admins.

Why Choose Xoxo Points?

  1. They are apt for repeat and loyalty use-cases. 
  2. Perfect for gamification. For example, if you would like to distribute incentives for learning use cases, Xoxo Points may be a good option.


Xoxo Links



Xoxo links are unique reward links that let recipients choose the reward of their choice with a single click. While they are similar to Xoxo Points in many ways, Xoxo Links are extremely easy to use amongst different reward types. The user experience is easy, and the redemption process consists of a single click.  

When it comes to Xoxo Links, partial redemption is not possible. End-users will have to consume the entire reward value in a single purchase. It is also not possible for them to combine multiple Xoxo Links.

It is also possible to use Xoxo Links to send anonymous rewards in use-cases such as survey rewarding. For companies looking to use rewards where the end-user needs a straightforward redemption process, Xoxo Links are apt. The advantage of using Xoxo Links is that the admins are charged only on redemption of the reward, and are not charge for unclaimed rewards. 


Benefits for admins and end-users:

  1. An extremely intuitive user experience for the end-user.
  2. Perfect for firms with a high percentage of unclaimed rewards.
  3. Avoid the hassle of dealing with multiple vendors to source rewards.
  4. Curation of the catalog is possible.


Xoxoday Rewards API



Powering modern digital currency solutions for firms across use cases such as employee, consumer, channel, and other types of rewarding, our API platform helps firms automate rewards, benefits, payroll, and manage catalogs seamlessly.

Benefits of Xoxoday Rewards API:

  1. Firms can save time, costs, and resources by using our solution.
  2. Quick go-to-market for teams.
  3. Scalable reward solutions.
  4. Top-notch customer support and technical documentation.
  5. 99.99% uptime capability.
  6. Excellent data security.


When can admins use these rewards?

1. For employee rewarding

Xoxoday enables you with instant incentive infrastructure to digitize and gamify rewards, commissions, and incentives for employee use cases to effectively engage employees with personalized rewards.

Firms can leverage Xoxoday to:

  • Extend market share in the industry and keep team spirits high.
  • Reduce employee turnover.
  • Generate a positive ROI on every dollar invested.


2. For Consumer Campaigns

With Xoxoday, you can create exciting consumer campaigns and discount coupon codes within minutes. You can also automatically share them with customers based on custom triggers and workflows.

Firms can leverage Xoxoday Rewards to:

  • Influence consumer decision-making.
  • Increase revenue in a short period of time.
  • Launch consumer promotions to test out new ideas/products. 


3. For Sales & Channel Rewarding

Sales leaders can motivate their sales and channel partners by gamifying channel incentives with leaderboards, contests, badges, milestones, and rewards.

Xoxoday can be leveraged to:

  • Boost sales and channel conversions.
  • Motivate sales and channel partners to achieve their targets.
  • Extend brand reach and foray into new markets.


There is something for everyone with a vast holistic catalog


Who doesn’t love the freedom to pick their present? 

With Xoxoday, firms can now surprise and delight their employees, prospects, clients, and channel partners with custom gifts that make them go wow from a plethora of options covering 21,000 options in 100+ countries. This include popular brands such as Amazon, Starbucks, Nike, Apple, and other gift card options.

With Xoxoday, it is possible for employees, consumers & partners get access to the best pre-negotiated perks & discounts from the best brands.  Xoxoday uses unmatched buying power and discovery platform at thousands of suppliers to help you build exclusive programs to suit your organizational goals with our discount solution.

Get:

  • Refreshing deals & offers every month.
  • Help your users save BIG on their regular expenses.
  • Access a wide range and best offers.



Memorable Experiences & activities that are hard to forget

Be it scuba diving or tandem skydives, thrilling bungee jumps or supercar track days, a wild encounter with the jungle cats, or a desert camping experience, reward your people an experience that will let them explore their adventurous streak and indulge their passions.

Explore from a range of handpicked experiences in travel, gourmet, local, hobbies, adventure, virtual & more. Our booking concierge service makes reservations, books travel and does whatever it takes to give you an incredible experience. All you have to do is choose your adventure.


Donations & Charity gifts that make a human impact

Build a deeper emotional connection with your employees, customers, and partners by empowering them to donate to a charity of choice.

  • Donate unused points or rewards.
  • Run marketing campaigns that align with your organization's mission and inspire your people into action.
  • Validated lists of NGOs, causes, and charity organizations.




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